Factory activity in the U.S. Northeast rebounded sharply in July, according to separate surveys from the Federal Reserve Banks of New York and Philadelphia, suggesting momentum is returning to a sector that had contracted for several months. The New York Fed’s Empire State Manufacturing Index rose to 5.5 from ‑16.0 in June, topping the median economist forecast of ‑9 and marking its first positive reading since February. New orders turned positive at 2.0, shipments advanced to 11.5 and the employment gauge climbed to 9.2, while the average workweek also expanded. Two days later, the Philadelphia Fed’s Manufacturing Business Outlook Survey showed its headline index soaring to 15.9, also the highest since February and far above the consensus call for a slight decline. Firms reported stronger demand—new orders jumped to 18.4 and shipments to 23.7—while the employment index swung to 10.3. Price pressures re-emerged, with the prices-paid measure rising to 58.8. Expectations for activity six months ahead improved to 21.5. Taken together, the positive readings indicate that manufacturing conditions in the region have improved at the start of the third quarter, though the uptick in input costs in the Philadelphia survey highlights lingering inflationary pressures.